Inflationary pressure, less cash in hand hit rural offtake of textiles from Surat – ET Retail

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Inflationary pressure and less cash in hand among the rural people have impacted the rural offtake of textiles from Surat, the hub of man-made fabrics. Traders said the marriage season demand from rural areas is down 50% year-on-year.

The marriage season, which began in mid-November last year, will continue till mid-March.

The Surat textile industry weaves about 45 million metres of fabric per day. “Of the total daily production, we are able to sell 2-2.5 crore (20-25 million) metres during the marriage season. The weaving units are facing problems and have been forced to bring down working days from six to four so that inventory does not pile up,” said Ashok Jirawala, president, Federation of Gujarat Weavers Welfare Association.

Retailers from rural areas are not stocking up as the demand is very less from villages, said traders. The decline in demand has forced the weaving units in Surat to reduce working days so that inventory does not pile up. There are 55,000 weaving units in Surat and 850,000 weaving machines employing about 750,000 people.

“Domestic market has slowed as it reels from over consumption and higher sales in the previous year,” said Vivek Merchant, head of the textile division at Swan Energy. “The usual pre- and post-Diwali increase in demand was missing in 2022. Unprecedented increases in cotton prices had impacted the segment adversely. Now that the prices are reverting to normal, things should get better. Demand from rural India has slowed too, due to inflation.”

Textile manufacturers said there has been a decline in demand from the retail end, mostly from rural India, with the result that wholesalers are not picking up dyed fabric and other textile items such as sarees and garments from them.

“The price of fabric has also come down due to lesser demand. The wholesalers are waiting for prices to fall further and, therefore, the offtake is less,” said Champalal Bothra, general secretary, Federation of Surat Textile Traders Association.

Merchant said a healthy harvest season, along with better minimum support prices for crops and the expected increased spending in rural India by the government ahead of the 2024 general election should lead to growth in the rural consumer segment.

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